Imagine a Future…Without Rate Cuts…

By David Gaffen

Little by little, expectations for Federal Reserve interest-rate cuts are being swept away. First from the first couple meetings of the year, then from the first half of the year. And the chances for such an occurrence are now being reduced for the latter part of 2007 as well.

The latest catalyst for this reassessment of where the Fed is going was the release of the Fed’s Beige Book, which sees moderate growth across almost all sectors and regions of the economy, thanks to improvements in retail sales and strength in the service sector.

Quarterly Eurodollar futures contracts show traders putting just a 32% chance of a rate cut by June, compared with 48% odds at Tuesday’s close. For September, the chances have dropped to 68% from 92% at Tuesday’s close, Dow Jones Newswires reports.

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